Google will make its long-awaited debut in the mobile phone handset market tomorrow when it launches in New York, with its first network partner T-Mobile, the first device that runs its Android operating system.

Called the G1, the new phone is made by Taiwan's HTC and presents a direct challenge to Apple's iPhone and the dominance of the world's largest mobile phone maker, Nokia.

The new handset - which is likely to be characterised as the first G-phone - has a touchscreen like the iPhone but includes a slide-out Qwerty keypad. The phone has previously been referred to as the HTC Dream and the "Kila", the project name given by T-Mobile and a reference to the network's hope that it will prove an effective weapon against the iPhone.

The phone is expected to go on sale in the US next month with hopes that it will be available in the UK by Christmas - depending on demand in the North American market. It is expected to cost about $199 (£108), which would put it on a par with the basic 8GB version of the iPhone sold by AT&T.

The arrival of the G1 is the latest salvo in a fight to control the software that will power the next generation of mobile phones, which can access the internet. More devices from other manufacturers will follow next year.

When Google announced its plans for Android last year they came alongside the unveiling of the Open Handset Alliance, a consortium of mobile phone makers and networks whose stated purpose is to "accelerate innovation in mobile and offer consumers a richer, less expensive, and better mobile experience".

As part of this plan, they made Android a so-called "open platform", which means no one is charged to use it either in a device or as a basis for writing applications. As a result, anyone can write programmes that will run on an Android phone - from maps and calendars to word-processing software and games.

A similar developer community has already sprung up around the iPhone, whose software is controlled by Apple although anyone can write applications that will run on it. Users of the phone and the iPod Touch have downloaded the 3,000 applications available from the iTunes store more than 100m times since it opened on July 8 this year.

But iPhone applications are only available through the iTunes store, meaning that Apple controls what is available to users. Applications for the G1 can be downloaded from anywhere, although there is talk that Google, HTC and T-Mobile will set up some sort of applications repository .

Nokia hit back at both Android and the iPhone in June by buying out the British mobile phone software company Symbian and announcing it would make its operating system - which powers about 60% of the global "smartphone" market - free.

The hope for Google is that ultimately Android will help more mobile customers get online through their mobile phone.

For many people in the developing world, the only way they are likely to get on the web, for the foreseeable future, is through a mobile device.

A quarter of a century on from the arrival of the personal computer there are roughly 1bn in use worldwide but that many mobile phones are sold every year. And growth in mobile usage is increasingly in the developing world, where fixed-line infrastructure is often patchy at best.

Being the first to market will be a source of pride for HTC, the Taiwanese company known mainly as a maker of handsets that run on Microsoft's Windows Mobile operating system.

LG and Samsung will unveil their first Google-powered mobile phones next year.